"What we call runaway private debt growth is what caused the [U.S.] crisis of '07. But it also caused every major financial crisis in this century: the Japan crisis of '91, the Asian crisis of '97, and on and on," said Vague, author of the new book, "The Next Economic Disaster: Why It's Coming and How to Avoid It," published by the University of Pennsylvania Press.

"That's because you're building way too much capacity too fast, beyond what you need, and you're incurring bad debt as you do that.''

He said that in the U.S. crisis of 2007, about $2.5 trillion worth of bad loans was created. The U.S. capital banking system has only $1.5 trillion in capital.

Private debt is a combination of business and consumer debt.

"There's about $26 trillion in private debt out there today, about 55 percent of that is business, 45 percent of that is consumer. Most consumer debt is mortgages,'' he said.

Vague says China's finances could trigger the next crisis.

"They are in the zone. They can prevent it if they act decisively, but they might not, and if they don't, it could spiral out of control,'' he said.

If that happens, the United States will be affected, Vague predicted.

"In a sense, we're not that close to it. But there's going to be spillover. It's the second-largest economy in the world. It's estimated to be $8 or $9 trillion to our $17 trillion,'' Vague said.

"There's going to be a lot of impact if there's a crisis on their neighbors, Korea, Vietnam, Australia, but we'll feel it all around the world at least somewhat.

"One of the ways we'll feel it is in reduced aggregate global demand, which will have an impact on our GDP growth.''